Underwriting insurance policies can be a complex and time consuming process. Many variables are considered in recognizing and qualifying the risks associated with underwriting a particular insurance policy, such as the location of the insured party and the reason for that policy. In particular, with respect to fidelity policies and surety bonds, the location of the particular job to be insured as well as the total contract amount of the project are typically important factors in setting premium rates. Different localities, such as different states often have different premium rates. Also, different areas within a state can carry different levels of risks associated with construction projects, for example.
Because of the many types of businesses and contracts that fidelity policies and surety bonds can be used to provide against loss for, the myriad variety of different forms required for underwriting such policies and the types of information needed to complete these forms makes the underwriting process a time intensive and complex one.
In the case of a fidelity policy for example, the type of business that is to be insured (whether it be a small business or a large corporation), the number of employees, as well as the location of that business, among other factors, are taken into consideration when quoting and providing a fidelity policy which will cover burglary and fire insurance for that business. Additional factors that can affect the premium amount for such a policy, such as past claims, are also taken into consideration when a fidelity policy underwriter is determining whether or not to issue such a policy to a prospective client.
In the case of a surety bond for example, such as when guaranteeing the performance of a construction contract, the type of building to be constructed, the area where it is to be constructed and the number of people working on that contract within a given time period are all relevant factors to be investigated by the bond underwriters. Again, different types of contracts require different types of surety bond form applications which must be selected correctly in order to adequately underwrite the bond and determine what the costs or premium of that bond will be. As the former tends to continually change over time, an insurance agent typically must periodically update his inventory of blank forms, discarding those that have been changed or superceded.
For these reasons, many insurance underwriters have opted not to underwrite fidelity policies or surety bonds, because of the complexities involved. For example, these types of policies require complex risk rating methodologies, non-standard contract terms and conditions, and using specialized legal documents such as Powers of Attorney, which must accompany the underwriting contract. Accordingly, there is a need for a system and method whereby fidelity policies and surety bonds can be quickly and accurately completed, and wherein risks are adequately and completely analyzed and considered in setting the insurance premium price.
It is therefore an object of the present invention to provide an automated system for generating underwriting policy contracts for the insurance industry.
It is a further object of the present invention to provide an automated system which will present to fidelity and surety underwriters a database of forms needed to complete the underwriting process, which forms are available over a global telecommunication network such as the Internet. In this manner, underwriters do not need to separately and individually maintain a library of ever-changing forms since they are to be located in a central storage means such as a web server.